It's certainly better than Microsoft owning Yahoo outright, which I think would have been a friggin' disaster for consumers (though the resulting mishegas would have been fun to watch -- from a distance).

Before teaming with Time Warner, AOL was the king of the Internet, as we all clamored to have slow, software-laden Internet access at $2.99 an hour like the good consumer lemmings we were in those days. But then cheaper, faster access arrived with DSL, cable and all-you-can-use plans, but AOL and stodgy Time Warner couldn't react quickly enough. There's a lesson here. Bigger isn't always better. I read that in a fortune cookie. I could have saved Time Warner and AOL a lot of money if I'd have told them that. Hey, Microsoft and Yahoo, are you listening?

...Microsoft will nevertheless reap a reward that's more valuable in the long run. The data on computer users' online search and buying habits would ultimately reside on Microsoft's computers, thereby improving its ability to automatically serve up the most relevant ads. "If Microsoft is running the underlying ad technology, it doesn't matter who is selling the ads," Sullivan says. "In the end, Microsoft will hold all the cards."

Like no other deal before, and possibly unlike any other search engine that's surfaced over the years, this positions Bing as a serious competitor to Google--still the number one search engine by an enormous margin. As Microsoft's Steve Ballmer puts it: "This agreement gives us the scale and resources to create the future of search."

Meanwhile, if you want a peek at what form a Microsoft-Yahoo collaboration might take (or, for that matter, "the future of search"), check out the horsey-looking, awkwardly named joint site they set up: ChoiceValueInnovation. If that's the best these guys can do, Google has nothing to fear.

The suspicion is that Yahoo, like AOL, is going to find itself hollowed out. Bartz in the phone call emphasized that, freed of the tedious binds of having to run a search engine, Yahoo can focus on "mobile".